Southern Pinellas County, FL

What is the FEMA 50 percent rule?

Along US coastlines and in federally designated flood zones, there are numerous structures con-structed directly on the ground, before elevation of structures in these areas was required. Such structures vary in age, condition, elevation, and construction quality. The Federal Emergency Management Agency (FEMA) regulations pro-vide that for these structures if the cost of improvements or the cost to repair equals or exceeds 50% of the depreciated value of the structure, the property must be brought up to current floodplain management standards. This provision is referred to as “the 50% FEMA Rule.” This rule gives property owners an understand-ing of how much money they are allowed to spend to improve or repair a property without elevating or otherwise bringing the structure into compliance with current FEMA standards. Therefore, an owner wishing to make improve-ments or repairs to a structure that does not comply with FEMA requirements must ascertain the value of the building.

A FEMA-related appraisal is not a simple undertaking. It requires extensive knowledge, not only of FEMA and the regulations it sets forth, but also of construction methods and materials, and local construction markets. This article will discuss the 50% FEMA Rule appraisal and associated FEMA regulations in general. It also explores different valuation methods and their appropriateness, establishes the required contents of a 50% FEMA Rule appraisal, and gives insight into professional issues that may arise in completing these assignments.